Delayed five months by Covid, the U.S. Copyright Royalty Board (CRB) released its new government-regulated royalty rates for the use of recordings in non-interactive streaming. This every-five-year exercise in setting statutory royalties is a crucial business factor for commercial and non-commercial companies which stream music to American audiences. That includes big operations like Pandora and AccuRadio, indie-station aggregators like Live365, and radio stations which simulcast their programming online.
There are two key numbers:
- the fee per stream/user. This number, always a fraction of a penny, is what a streaming company must pay to deliver one stream to a single user.
- the minimum fee, paid upfront at the start of each year, is both a minimum and a down payment on actual fee calculations that happen through the year.
The per-stream fee is now $.0021 for non-subscription streaming (think Pandora’s free service), up from $.0018 last year — a 16% raise.
The minimum fee is $1,000 per channel, up from $500 in the previous royalty cycle. for entities containing more than 100 channels, the minimum is capped at $100,000, up from $50,000.
These fees cover the 2021-2025 period, are subject to potential cost-of-living adjustment during that term, and apply only to the type of streaming regulated by the CRB, which is defined by three conditions:
- Non-subscription listening plans: Listening environments that are unpaid-for by the listener, as opposed to subscription services joined with a subscription fee.
- Non-interactive streaming, or passive listening, where the listener has no choice, or limited choice, of song sequences.
- Music streaming whose payment rates for the use of recordings is not determined by private, negotiated agreement.
A separate rate pertains to subscription-service streams, and it is $.0026 per stream/user.
Royalties are paid to SoundExchange, the government sanctioned organization for the collection and distribution of royalties.
This iteration of the CRB process is nicknamed Web V, and follows four previous cycles that began in 2005. The CRB decision is formally called Web V Determination. The headline numbers represented here come out first, and they were released late Friday. Some weeks from now the CRB will follow precedent and release a statement of reasoning — a document that summarizes arguments made by participating parties during a legal lead-up to the determination, and presents the CRB rationale for its judgment. The Copyright Royalty Board is a three-judge bench.
The Web IV Determination in December, 2015, setting rates for 2016-2020, was tectonic for small webcasters. Along with rate escalation, the expiration of the Webcaster Settlement Act of 2009, which provided reduced royalties for small webcasters, caused a general wipeout in the amateur and semi-pro internet radio landscape. That fertile niche of the industry has recovered to some extent, thanks to aggregator platforms which can monetize a large inventory of advertising across hundreds or thousands of stations.
(Thanks to David Oxenford for quick notification of the CRB rate release. David Oxenford is the leading broadcast/streaming law attorney in the country, a RAIN Summit speaker, and guest columnist for RAIN News. Follow his Broadcast Law Blog HERE.)